Major carrier profits boom as cat losses shrink

Major carrier profits boom as cat losses shrink | Insurance Business America

Major carrier profits boom as cat losses shrink
A calm 2013, devoid of major catastrophes, helped boost profits for several major property/casualty insurers and reinsurers in the fourth quarter. Hartford Financial, Munich Re and Chubb all posted better-than-expected earnings these past two weeks, attributing their success to fewer cat losses.

Hartford Financial Services Group announced a $314mn income for 2013’s fourth quarter Tuesday, standing in stark contrast to the $46mn loss the insurer took a year earlier. Hartford attributed 2012’s poor performance to cat losses stemming from Superstorm Sandy, which hit New York and New Jersey in October of that year.

The gain equates to an increase of 94 cents per share, outstripping analyst predictions of 90 cents per share.
That same day, global reinsurer Munich Re AG announced substantial gains in its fourth-quarter earnings, also surpassing analyst forecasts and its own full-year profit target.

Munich Re enjoyed a $1.62bn profit in the fourth quarter, which more than doubled its earnings during the same period a year earlier and far outstripped analyst forecasts of $1.24bn.

In addition to benefitting from low disaster losses, Munich Re attributed its success to a lower tax rate The reinsurer recalculated taxes for previous years and used carried-forward tax losses incurred by its US subsidiary, it said.

Hartford and Munich Re’s positive announcements were preceded by those of the Chubb Corp. The P/C insurer saw claims fall 30% in the fourth quarter, resulting in $3.04bn in net earned premium—a 4% rise from last year.
Meanwhile, losses and loss expenses fell to $1.66bn. Again, the company attributed to changes to lower cat losses. Chubb added that its own success was seen across all lines of business.

“Our combined ratio in the quarter was a very strong 85.5%, once again reflecting the impact of higher rates and strong underwriting performance in all our business unites,” CEO John Finnegan said.

Hartford, Munich Re and Chubb all announced share buyback plans in the wake of their positive performances.